Lowest Responsible Bidder Awarded Bid Preparation Costs

The Fourth Appellate District affirmed a judgment. The court held that the lowest responsible bidder on a public works contract was entitled to its bid preparation costs after the contract was awarded to a different bidder.
West Coast Air Conditioning Company, Inc. was among the bidders on a public works contract by the California Department of Corrections and Rehabilitation (CDCR). CDCR awarded the contract to Hensel Phelps Construction Co. (HP). West Coast filed a petition for writ of mandate challenging that award and seeking to enjoin CDCR from awarding the contract to HP. West Coast alleged myriad defects in HP's bid. In its prayer for relief, West Coast requested general damages in an amount sufficient to reimburse it for its bid preparation costs and interest.
The trial court  rendered judgment in favor of West Coast, finding HP's bid to be illegal and unresponsive as a matter of law. The court issued an injunction barring HP from performing any further work on the project, and awarded West Coast its bid preparation costs of $250,000. The court nonetheless declined to order CDCR to award West Coast the contract for the remaining work, despite having previously found that West Coast was the lowest responsible bidder and should have been awarded the contract. CDCR appealed the award of bid preparation costs.
The court of appeal affirmed, holding that the trial court properly exercised its broad equitable authority when it awarded West Coast its bid preparation costs under a promissory estoppel theory. First, there was overwhelming evidence to support the trial court's finding that West Coast's bid was responsive. Further, that West Coast had already obtained relief in the form of a permanent injunction did not preclude an award of bid preparation costs. The issuance of a permanent injunction in favor of West Coast, the lowest responsible bidder, without either an award of the public works contract to it or an award of damages equal to its bid preparation costs, would result in an inadequate remedy. West Coast prepared its bid and incurred $250,000 in costs in reliance on CDCR's representation that the contract would be awarded to the lowest responsible bidder, which turned out not to be the case.

West Coast Air Conditioning Company v. California Department of Corrections and Rehabilitation, March 20, 2018


Employer's Payments to a Union Vacation Trust Fund on an Employee's Behalf Not Reportable Wages

Steven Mora sued former employer Webcor Construction, L.P. for violating Labor Code §226(a) by failing to list the hours and hourly rate associated with a payment described as "Union Vacation" on Mora's wage statements. It was undisputed the amounts in question were payments to a union vacation trust fund authorized by the Labor Management Relations Act of 1947 (LMRA), also known as the Taft--Hartley Act.
The trial court sustained Webcor's demurrer without leave to amend.
The court of appeal affirmed, holding that the payments were not within the scope of §226(a). Section 226(a) requires employers to provide employees wage statements itemizing, among other things, all wages earned, including the hours worked and applicable rates of pay. The statute is highly detailed, containing nine separate categories that must be included on wage statements. None of these categories, however, references payments to an employee benefit trust fund. Further, these payments, unlike payments of accrued vacation pay, were not payments owed to Mora. Rather they were payments owed to the trust fund. Although Mora had some expectation of benefits from the trust fund, he did not allege an entitlement to receive the entirety of the payments made by Webcor on his behalf. The payments thus could not be deemed wages owed to Mora. Section 226(a) did not apply.

Mora v. Webcor Construction, LLP, First DCA, February 6, 2018.


Worksite Immigration Enforcement Law (“Sanctuary State” Law)

This law adds various new sections to the Government and Labor Codes which impose significant restrictions and requirements upon employers in connection with federal immigration law enforcement. 

Employers may be liable for prescribed civil penalties, up to $10,000 per violation.

Unless federal law requires otherwise, Government Code sections 7285.1 and 7285.2 prohibit an employer or other person acting on the employer’s behalf from providing voluntary consent to an immigration enforcement agent to either (i) enter a nonpublic area of business, unless the agent provides a judicial warrant, or (ii) access or review of the employer’s employee records without a subpoena (which may be issued by a court or administrative agency officials) or judicial warrant.  

The prohibition does not apply to I-9 Employment Eligibility Verification forms and other documents for which a notice of inspection has been provided to the employer. The law specifies that nothing in these provisions is intended to restrict or limit an employer’s compliance with E-Verify requirements. 

Labor Code section 1019.2 prohibits an employer from reverifying the employment eligibility of a current employee at a time or in a manner not required by specified federal law. This could impact when and how companies perform immigration law compliance audits, respond to reports or suspicions of unauthorized workers, and correct individual employee forms.



Parental Leave for Small Employers

The New Parent Leave Act (Govt. Code § 12945.6) will require businesses with 20 or more employees to provide eligible employees up to 12 weeks of unpaid, job protected leave to bond with a new child within one year of the child’s birth, adoption or foster care placement.


"Ban the Box" Now Applies to all Employers with Five or More Employees

Several years ago, California passed a “ban the box” law that was limited to state agencies, cities and counties. Effective January 1, 2018, California extended the “ban the box” law to private employers with five or more employees. The new addition to the California Fair Employment and Housing Law is codified at Government Code section 12952. 

Section 12952 also requires a multi-step process for requesting and considering an applicant’s criminal conviction history, only after a conditional job offer is made. 

            1.         What Can Be Considered, and When: Employment applications cannot include any questions that would disclose an applicant’s conviction history prior to a conditional offer of employment.  Similarly, employers cannot inquire into or consider the conviction history of an applicant before making a conditional offer of employment.  Certain information, such as specified arrests not resulting in conviction, referral to diversion programs, and sealed convictions, cannot be considered, distributed or disseminated at all. 

            2.         Individualized Assessment: If the employer intends to deny an applicant a position based solely or in part on the applicant’s conviction history, the employer must make an individualized assessment, based on factors set forth in Government Code Section 12952, of whether the applicant’s conviction history has a direct and adverse relationship with specific duties of the position that justify denying the applicant the position. The employer may, but is not required to, commit the results of this individualized assessment to writing. 

            3.         Preliminary Decision Notification to Applicant: The employer must then notify the applicant in writing of its preliminary decision, including attaching a copy of the conviction history report, identifying the conviction(s) being used as the basis of the preliminary decision to rescind the offer, and providing the applicant with a detailed explanation of his or her right to respond to the notice before it becomes final and the deadline to do so, which must be at least five business days out. The notification may, but is not required to, outline the employer’s justification. 

            4.         The Applicant’s Response: If the applicant timely informs the employer that he or she disputes the accuracy of the conviction history report and is taking specific steps to obtain evidence to support this assertion, the applicant will have an additional five business days to respond to the notice. 

            5.         Consideration of Evidence Submitted by the Applicant: The employer must consider the information submitted by the applicant disputing the accuracy of the conviction history report before making a final decision. 

            6.         Notification of Final Decision: If the employer makes a final determination to deny the applicant the position, the employer must notify the applicant in writing of the final denial, any procedures the employer has for the applicant to challenge the decision or request reconsideration, and the applicant’s right to file a complaint with the Department of Fair Employment and Housing. The employer may, but is not required to, explain its reasoning for the denial.